If you don't qualify for conventional loans, FHA loans are the way to go. They are quite flexible and unlike conventional loans that require a 50% down payment, FHA loans require down payments as low as 3.5%.
However, to determine if FHA loans are right for you, here's everything you need to know about them.
What is an FHA Loan?
Federal Housing Administration (FHA) loans are backed by the federal government and are recommended for first-time home buyers. FHA loans require a lower minimum credit score and down payments so repeat buyers with poor credit scores can qualify.
4 FHA Loan Requirements
FHA loans work like conventional loans with a significant difference in minimum mortgage requirements. Here are four of the requirements for FHA loans:
1. Credit Score and History
FHA loans are more flexible with their credit score and history requirements, compared to conventional loans. Whether your credit history has rough patches like foreclosure or bankruptcy, you can still stand a chance with FHA loans. You can be eligible for a loan with FHA for two to three years respectively, after bankruptcy or foreclosure.
2. Down Payment
Like conventional loans, FHA loans require a down payment but are relatively low. The minimum amount of down payment you are eligible for is dependent on your credit score. For instance, if you have a credit score of 500, you are eligible for a down payment as low as 10% while if your credit score is 580, you are eligible for a 3.5% down payment.
3 . Interest Rates
Only FHA-approved lenders can provide the interest rate. However, the higher your credit scores are, the better your rate will be.
4. Property Condition
The home being purchased with FHA loans must meet the FHA property requirement and it must be appraised by an FHA-approved appraiser.
Let Anew Lending Help You Obtain an FHA Loan
Anew Lending is a reliable mortgage broker in Sacramento, CA that offers expertise in every area of mortgage lending.
Their loan officers are experienced and can help you obtain any loan. They will work closely with you, explaining your options and making recommendations of the best-suited mortgage loans for you.
Anew Lending also offers in-house loan programs with competitive rates and low fees to help their clients obtain the best loan possible. You can rest assured that you will be optimally satisfied with their services.
Visit their official website or call (916) 655 9294 to get a free estimate.
